Aiming to create a hub city of shipbuilding culture
and shipbuilding industry cluster core hub'Shipbuilding Industry Promotion Vision of Onomichi City'In March 2012, the City of Onomichi drew up its Shipbuilding Industry Promotion
Vision of Onomichi City. The goal of this plan is to assure that the shipbuilding andmarine equipment industries, two of Onomichi's core industries, remain competitive
into the future, and to maintain and develop them into industries that are able tocontinuously provide support to the city's economic development. The plan gives twofuture visions for the city, namely a 'sustainable and competitive shipbuilding industry
core hub' and a 'hub city of shipbuilding culture', and states that the public and private
sectors will work more closely together in an effort to realize those visions.
Given changes to the shipbuilding industry environment, the City of Onomichi set up a
public-private exploratory committee in October 2011, which compiled the Shipbuilding
Industry Promotion Vision of Onomichi City based on analyses of official research dataand questionnaires given to various local business operators.
According to that Vision, looking at the City of Onomichi's industrial composition by
number of employed workers indicates that 32.9% work in secondary industries, towhich shipbuilding belongs, making it one of the highest percentages in all ofHiroshima prefecture. The manufacturing industry, to which shipbuilding belongs,
makes up approximately 70% of Onomichi's entire secondary industry sector, revealing
its status as one of the city's important core industries.
Looking at the data by number of businesses, the transportation machinery industry,also to which the shipbuilding industry belongs, saw a decrease in number of places ofoperation from 90 in 2006 to 75 in 2010. In Onomichi, the percentage fell from 20.5% to18.2%. By number of employees, the number of workers in the City of Onomichi's
manufacturing industry rose from 128,000 in 2006 to 136,000 in 2010. The
transportation machinery industry, however, experienced a decrease from 34.1% to31.2%. This prompted the conclusion that the number of shipbuilding industry workers
was falling faster than the number of places of operation.
The yearly production value for Onomichi's shipbuilding industry for 2008 wasapproximately Y186 billion (about Y110 billion from the shipbuilding industry and Y76
million from the marine equipment industry), meaning that it accounted for almost
entirety of the transportation machinery industry and approximately 30% of the entire

city. The total induced production value within Hiroshima brought about by production
activity of Onomichi's shipbuilding industry is estimated at approximately Y141 billion.
Induced production value combines the production spillover of raw materials, parts, andoffice services within the prefecture with the production spillover of raw materials,parts, and office services related to the consumer goods industry brought on by theincrease in employee income. Based on the induced production value figure, it was clear
how far-reaching the impact was on all industries in the prefecture, including ships,ship repairs, and steel. Based on the above, Onomichi's shipbuilding industry has an
estimated total effect of approximately Y327 billion for the prefecture.
Similarly, it is possible to estimate the induced production value within the City of
Onomichi based on the total prefectural induced production value (approximately Y141billion) by using its portion of employees and cargo value by industry, which results inapproximately Y21 billion, indicating that the total effect within the City of Onomichi ofOnomichi's shipbuilding industry is an estimated Y207 billion.
The next thing to do was analyze how Onomichi's shipbuilding industry affects tertiaryindustries. The total spillover to tertiary industries of the prefecture's induced
production value (Y141 billion) is approximately Y67 billion, and the total spillover totertiary industries of the City of Onomichi's induced production value (Y21 billion) isapproximately Y10 billion, resulting in an induced production value of about 50%.
Tertiary industries that are particularly affected by the shipbuilding industry include
automobile and machine repairs, commodity rental services, railway transport,
research retail, and offices services such as finance, accounting, wholesale, insurance,and banking. These facts clearly indicate that shipbuilding is a significant industry to
the City of Onomichi, prompting the abovementioned future visions for the city, namely
becoming a 'sustainable and competitive shipbuilding industry core hub' and a 'hub cityof shipbuilding culture'.
The City of Onomichi conducted questionnaires and interviews with various business
operators, from which it extracted seven challenges currently facing the city'sshipbuilding industry. In order, they are: (1) finding more opportunities to increase
order volume by improving shipbuilding facilities, (2) improving competitiveness bystreamlining and cutting costs, (3) improving competitiveness by tapping into new
categories and markets, (4) improving added-value by advancing research anddevelopment, (5) exhibiting more collective strength through inter-corporation
collaboration, (6) securing, stabilizing, and fostering sustainable technicians and skilledworkers, and (7) creating a mutually beneficial and harmonious relationship with theenvironment.
The following table of solutions is presenting to tackle these seven challenges with thegoal of realizing the abovementioned future visions for Onomichi.

To realize the vision of a shipbuilding industry cluster core hub, 'the city will continue toincrease its competitiveness by improving sophistication of both its production andlogistics environments, while also improving added-value items such as high credibility
and technical prowess through improved partnerships between companies.' To realize
the vision of a hub city of shipbuilding culture, 'the city will attempt to boost its regional
strength as its foundation for industrial promotion with regard to the Maritime City ofOnomichi'. The City of Onomichi plans having the public and private sectors work
together in order to achieve these visions.

Solutions & Promoted Projects for the Problems surrounding Onomichi's Shipbuilding Industry[In order to realize "Core Hub for sustainable and competitive shipbuilding industry cluster"]Directionality of Problem Solutions
Working bodyApproaches
Boosting capacity & Sophistication of well-designed
Enhancing
SB Industry
Scrutiny of necessary production base
Securing of necessary production basecompetitiveness efficiency ofproduction baseOnomichi city Support for private reclamation works
by improving
production base
Study on request for easing of regulations
production &Request for enhanced infrastructure baselogistics
EnhancingsupplyFunctionenhancement
forcoastalSBIndustry
Enhancement of loading/shipping function
environment
Onomichi city Support for training/procurement of coastal shipping seafarers
chain by utilizing the shipping
Promotion of port/harbor facilities
SB Industry
Request for related organs
sea and bridges
Onomichi city Request for arrangement/projects of port/harbor facilities
Promotion of road improvement along SB Industry
Request for related organs (cut in Honshu-Shikoku Bridge fare)
Onomichi city Promotion/advancement of road improvement works
Setouchi coast line
Improvement of Improvement ofDevelopment of sophisticated
SB Industry
Joint research by marine industry and universities, etc.
Onomichi city Creation of matching opportunities
added value by added value byspecifications
Dispatch of information on advanced cases/various systems
reinforcing
enhancing R&D
Upgrade of production technology
SB Industry
Study on business integrations/alliances
partnerships
capabilities
Onomichi city Creation of matching opportunities
and facilities
Support for securing industrial site along coastlines
Creating manuals/offering courses for SB Industry
Improvement ofDrawing up manuals, providing courses
Onomichi city Safety measure enhancement support by using Innochima TC
accident prevention
added value by
SB Industry
Enhancement/usage promotion of safety training center
Enhancement/usage promotion ofenhancing safety
Onomichi city Safety measure enhancement support by using Innochima TChands-on safety training facilities
measures
Improvement ofPersonnel exchanges and sales
SB Industry
Holding study/research meetings among enterprises
Participating in conventions
added value bypromotion within shipbuilding industry
Onomichi city Support for holding study/research meetingsenhancing humanSupport for PR activities utilizing conventions, etc.
resources network
Enhancement of manpower supply
SB Industry
Support for facility enhancement at Innoshima Technical Center
Onomichi city Support for facility enhancement at Innoshima Technical Center
function at Innoshima Technical[In order to become "Hub city for shipbuilding culture"]
Enrichment of shipbuilding & maritime SB Industry
Cooperation with media inquiries, provision of materials/data
Enhancement of Enhancement of
Onomichi city Enrichment of materials/data libraries
regional strengths
data library, and dispatch of suchregional
Information dispatch via Maritime City Onomichi Website
via cooperation with information
strengths that
Promotion of the maritime industry's SB Industry
Reinforcement of internshipeducation
support theOnomichi city Implementing history/culture courses and offshore seminars
ideas
Maritime City
Implementing maritime learning seminars
OnomichiSupport for marine school courses
Promotion of career education
Enhancement ofCreating shipbuilding city
Yard tours, opening to the public of launching ceremonies
SB Industry
Foreign trainees' involvement in community activities
regional strengths by
Onomichi city Creating occasions for regional communication
uniting with thePromoting development of cities where young people settle dow
regionCreating industrial tourism
Nurturing personnel who escort industrial heritage
SB Industry
Enhancement ofCooperation with passenger ship associations, etc.
regional strengths by capitalizing on shipbuilding industry's
Onomichi city Support for setting up industrial sightseeing courses
resources
uniting with tourist
Support for promotion of passenger ship utilization
promotion entities